I think if someone has a little, tiny dog and takes them out in public, it's perfectly reasonable to carry it in a handbag or whatever. A tiny dog can't keep up with a person for overly long and it's dangerous to let it walk where harm could come to it. I see people walking their big dogs in town all the time. Do they get castigated for "showing them off"? The small dogs get plenty of exercise in their own yards or even homes, but if the owner wants to go out with them, letting the dog enjoy some fun time out & about in town, what's the big deal?
I grew up with a Pocket Toy Poodle. Occasionally, my mother would take the dog out in her purse if we had an errand to run and Brandy indicated that he wanted to go with us (yes, Brandy was a boy. My aunt named him because she was a bartender & he looked the color of brandy).
The same aunt had a Chihuahua, but I don't know how often she took the dog out in public. He was a very mean little dog. She married a veterinarian and they lived on many, many acres of land. The dog had plenty of places to roam when it wanted.
This was all way before the small breed dog trend of today! I think tajnz is onto something about these smaller dogs making more sense for so many people now, due to cost of upkeep and smaller living conditions.
